Multinationals: The Game and the Rules: Multinational Corporations in World Politics

About the Author:

As dramatic as the rise of the multinational corporation has been its increased political prominence. The very term implies a political visibility not associated with the words "direct investment" that were used a decade ago. In the past two years the role of these spreading enterprises has been debated in the International Labour Organisation, the Organization for Economic Cooperation and Development, the European Community, the U.S. Senate and the U.N. General Assembly. During 1973 a "Group of Eminent Persons" met under the auspices of the U.N. Economic and Social Council to study the role of multinational corporations in international relations and the process of development.1

To the common (and oversimplified) question whether multinational corporations are likely to render the sovereignty of the nation-state obsolete, the answer surely is a qualified "no." The multinationals are undoubtedly a large force to be reckoned with. There are currently some 200 large multinational enterprises or clusters of corporations which operate simultaneously in 20 or more different nations and are joined together by common ownership and management strategy.2 The three billion dollars of value added annually by each of the top ten multinationals is already greater than the gross national product of some 80 member-states of the United Nations, and some observers are predicting that by the end of the century 300 giant corporations will account for a large majority of world industrial production. Yet even weak states can and sometimes have nationalized the local affiliate of a multinational corporation. For the foreseeable future, the two kinds of entities will continue to coexist, in uneasy tension.

Why do multinational corporations now seem to many nations to represent an important threat? What in fact are the intended or unintended political roles they play? What can one now say about the longer-term impact of multinational corporations? And, the most acute subject of present controversy, what can be done to cushion or regulate the conflict that many now see between multinational corporations and the less-developed countries?